Wednesday, December 03, 2008

The Cost of College

Getting a college degree is becoming ever more expensive in direct financial terms:

The rising cost of college — even before the recession — threatens to put higher education out of reach for most Americans, according to the annual report from the National Center for Public Policy and Higher Education.

Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007, adjusted for inflation, while median family income rose 147 percent. Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.

"If we go on this way for another 25 years, we won't have an affordable system of higher education," said Patrick M. Callan, president of the center, a nonpartisan organization that promotes access to higher education.

"When we come out of the recession," Mr. Callan added, "we're really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we're one of the few countries where 25- to 34-year-olds are less educated than older workers."

Although college enrollment has continued to rise in recent years, Mr. Callan said, it is not clear how long that can continue.

Studies done by nonpartisan organizations that promote access to higher education might be somewhat biased towards findings which allow them to ask more funding for higher education. I have no idea if this particular study is biased that way. But I'd be very surprised to read about a study which finds that college is very affordable and that financial aid could easily be cut. Indeed, studies with these types of findings have been the rule for some decades now.

This does not mean that the findings wouldn't just indicate a trend towards more unaffordable college degrees, of course. But the proper way to evaluate that question is slightly different from just looking at the sticker price on a college degree.

First, note that the best way to view going to college is as an investment, in this case an investment in your future earnings capacity. The benefits from a college degree are largely in the extra amount of money college graduates earn each year over and above what otherwise similar high school graduates earn. And that earnings differential is still large. It may well be large enough to justify greater loan-taking by the students or their families.

Second, the costs of this investment in your future are not just the costs of tuition and books and such. A large part of those costs are the earnings a student forgoes by being in college rather than in the labor market. A proper study of this would look at these costs, too, to see if they have grown or shrunk over the years.

Is that too boringly academic? I could do lots more on that, with comparisons between men and women and students from different racial groups. For all of them, though, going to college is still a good private investment, 'private' here meaning an investment which we only analyze from the point of view of the person investing her or his time, money and energy in one way rather than in some other alternative way.

If we apply a wider lens to the question and ask what the ideal 'social' investment in education might be, in this country and for different types of students, slightly different questions ask to be answered. For instance, it is bad for the whole society if able but poor students can't go to college, because then we as a society don't get to enjoy their talents to the extent that's desirable. This argument alone (without adding the other one about education being one of the few reliable ways out of poverty) suggests that loans and scholarships for poor-but-brilliant students are a very good thing. But who should pay for those loans and scholarships? And should they be equally available to all poor students, all brilliant students or just everybody?

"When we come out of the recession," Mr. Callan added, "we're really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we're one of the few countries where 25- to 34-year-olds are less educated than older workers."

Is there really such an educational gap between the U.S. and the rest of the world? This country is still one of the richest in the world, with one of the highest percentage of students going to college in general? What is Mr. Callan specifically alluding to?

I'm not sure and I'm too lazy today to research it myself. It's easier and more efficient for me to let my brilliant readers tell me. But people who get college degrees in most other countries are actually a smaller percentage of the total population than is the case in the U.S.. It's true that public financing of those degrees is more common so that going to college is easier in that sense, but getting into a college, now that's a lot harder because of entrance examinations and such.

It could be that the ideal American concept of college for everyone for four years (and that doesn't even include graduate school for law degrees etc.) is just not sustainable in its common form. Something which combines the basic ideas of college with firm occupational training within the same time frame might have to suffice.

At the same time, I'm not a great fan of distance learning as a replacement for the traditional college experience. Much of what I learned in college came from being put in one place with lots of people I'd never have met otherwise. Much of the learning took place outside classes altogether, and what I learned in classes was really how different minds worked.

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